Thursday, August 3, 2017

It’s not often you hear large corporations arguing in favour of government regulations. But a group representing some of the world’s biggest technology companies, including Google and Facebook, is doing just that. They want the US government to abandon its plan to repeal the laws preserving net neutrality, the idea that internet service providers (ISPs) should treat all internet traffic the same and not block, slow down or otherwise discriminate against particular websites or online services.

The US Federal Communications Commission recently received 10m comments in its consultation on the subject and they largely opposed the plans. Yet the regulator seems determined to follow through with a repeal of the net neutrality rules.

There are undeniably good arguments on both sides and finding a consensus is hard. But the main problem is not that the current rules preserving net neutrality are unbalanced. There’s a more fundamental question about whether we needed such rules in the first place. If not, repealing them won’t spell the disaster that activists fear. In fact, it would mean net neutrality is largely a solution to a problem that doesn’t exist.

In the early days of broadband, net neutrality stood for the idea that ISPs should be seen just as data carriers, much like telephone companies carried voice calls. This would prevent them from favouring their own services or those of affiliates. The FCC tried several times to pass rules to ensure net neutrality, and the current ones that the Trump administration wants to repeal, were adopted just two years ago. Similar rules were introduced in the EU with the 2015 Open Internet Regulation.

Net neutrality is in Trump’s sights.EPA/Zach Gibson

The problem is that very few documented cases exist of ISPs actually violating the principles behind net neutrality, and in several of those cases the evidence is scarce and unconvincing. For instance, in its 2014 proposal for net neutrality rules, the FCC cited the example of AT&T temporarily blocking Apple’s FaceTime app. But following an investigation, the regulator later found that AT&T had legitimate reasons to do so.

In another example, the FCC accused Verizon of blocking certain tethering apps but later settled the case using spectrum licensing rules rather than net neutrality ones. And the two most glaring violations of net neutrality that started everything date back more than a decade, without recent equivalents.

But a closer look shows that the report didn’t argue these practices amounted to a violation of net neutrality. Indeed, the UK regulator Ofcom did not identify a single case of net neutrality violation in the UK, despite the continuation of traffic shaping practices.

The counter argument is that there have only been a few incidents, precisely because of the deterrent of existing net neutrality rules. But this is a feeble argument, because there is no correlation between the timing and frequency of net neutrality violations and the introduction of the regulations.

Better alternative

Repealing superfluous regulations is generally a good idea, because regulation comes at a cost. But we do not even need to go as far as full repeal of all net neutrality rules. There are less onerous measures than the current rules that are more suitable to the level of risk currently posed by net neutrality violations.

For instance, we could treat violations of net neutrality as a breach of competition law instead of having separate rules. Or authorities could set broad objectives, which the industry would have to meet through self-regulation. My personal favourite is regulation similar to competition law rules, using a single general rule of bad conduct that regulators could then apply on a case-by-case basis. This approach combines the expertise of a sector-specific regulator with the flexibility of competition law.

I don’t mean to suggest that the broadband industry works flawlessly and that no oversight is needed. But the current net neutrality rules, especially in light of the dearth of documented actual violations, feel like overkill.

Regulatory agencies have spent far too much time quibbling about net neutrality, instead of turning their attention to more contemporary and pressing issues. We are at the cusp of the introduction of the next generation of mobile internet technology (5G) and governments still haven’t worked out policies for how the radio spectrum will be used to make this possible. Interconnection between companies that provides internet infrastructure has largely been left unregulated so far, and has now become a much more crucial issue than in the past. It requires urgent attention. This is where the next big battles will be fought.